Untainted or ancestral properties can be attached under the PMLA as "equivalent value" of proceeds of crime if the actual tainted property cannot be traced, as the statute does not grant immunity to inherited properties.

RAVINDER DUDEJA, J. (ORAL)

CM APPL. 10454/2026-Exemption

1. Allowed, subject to all just exceptions.

CM APPL. 10456/2026

2. This is an application seeking condonation of delay of 9 days in re-filing the appeal.

3. For the reasons stated in the application, the same is allowed.

4. The application stands disposed of.

MISC. APPEAL (PMLA) 13/2026 & CM APPL. 10455/2026

INTERIM RELIEF

5. The present appeal is filed under Section 42 of the Prevention of Money Laundering Act, 2002 [“PMLA”] assailing the impugned order dated 27th November, 2025 passed by the Appellate Tribunal under the PMLA in FPA-PMLA-2158/DLI/2018 whereby the Tribunal upheld the confirmation of the Provisional Attachment Order dated 28th July, 2017 issued by the respondent Directorate of Enforcement.

6. The learned counsel for the appellant submits that the subject property, that is, 255, Sainik Vihar, Pitam Pura, Delhi was never purchased by the appellant. The said property was purchased by the father of the appellant out of his own income in the year 1991 in the joint name of appellant and his own. The said property has been with the family of the appellant continuously since the year 1991. The appellant never contributed any sum in the acquisition of the said property.

7. It has been argued that subject property could not have been attached as “value thereof” in terms of Section 2(1) (u) of PMLA, 2002, since the said property was never actually purchased by the appellant himself. The right of the appellant in the subject property has flown through his deceased father and thus, it was wholly impermissible to rely upon Section 2(1) (u) of PMLA to attach the said property. Placing reliance on judgment of Karnataka High Court in H.M. Malthesh Vs. Directorate of Enforcement , dated 18th December 2020 in Criminal Petition No. 584 of 2018, it is argued that as per Section 2(1)(u) of PMLA, only these tainted properties, which are obtained directly or indirectly as a result of criminal activity relating to scheduled offence, can be termed as “proceeds of crime”, which is not the situation in the present case, as the subject property was not purchased by the appellant’s money but was rather purchased by his father from his own money. He also places reliance on the judgment of Supreme Court in Pavana Dibbur Vs. Directorate of Enforcement (2023) 15 SCC 91 to argue that any property bought prior to the commission of Scheduled Offence shall not be attached.

8. Per contra, learned Special Counsel for the respondent submits that the proceeds of crime acquired by the appellant in the form of foreign exchange, had been remitted abroad and were not available and therefore the subject property belonging to the appellant was attached as “equivalent value” by order passed under Section 5 of PMLA read with Section 2(1) (u) of PMLA and such action is therefore within statutory framework.

9. We have considered the rival submissions. The principal contention urged on behalf of the appellant is that the subject property was neither acquired nor purchased by the appellant from proceeds of crime and was ancestral in nature, and therefore, could not have been attached. At the very outset, it is apposite to note that the competent authority under Section 5 of the PMLA is empowered to provisionally attach property believed to be proceeds of crime. The Hon’ble Supreme Court in the case of Vijay Madanlal Choudhary and Ors. Vs. Union of India and Ors. (2022 SCC OnLine SC 929), held that the offence of money laundering is not dependent on or linked to the date on which the scheduled offence/predicate offence is commi